Marriott International said Monday it would buy The lifestyle Hotel Brand CitizenM For $355 million, the company will expand its presence in urban markets by launching a new brand of small rooms equipped with tech and minimalist amenities, with playful décor.
Marriott, the largest hotel chain in the world, has acquired the 36 hotels of citizenM, which are spread across more than 20 U.S. cities, Europe and Asia Pacific.
Both companies expect to close the deal later this year, pending regulatory approval.
The deal structure includes a $355 million upfront payment to acquire the brand and intellectual property. Earn-out payments up to $110 millions are possible based on future growth metrics. These payments would not begin until four years after the closing.
Marriott CEO Anthony Capuano stated in a press release that the acquisition will boost the operator’s offering in the so-called “select-service” end of the market or hotels with full-service amenities.
PLUS: Marriott CFO on Preserving CitizenM’s ‘Innovative DNA’
Staying Asset Light
Marriott is trying to reduce its assets, but CitizenM leases and owns almost all of their properties. CitizenM properties will be owned and leased under long-term franchise contracts by the seller.
CitizenM currently operates 8,544 hotel rooms. Three additional properties are under construction and will add over 600 rooms by the middle of 2026.
Marriott believes that this deal will enable them to “approach and reach” 5% growth in net rooms for the entire year 2025. The company stated in February that it expected a “4%-5%” increase in net rooms for this year. It grew net room numbers 6.8% last year. As the largest hotelier in the world expands, it is harder to maintain previous growth rates.
Marriott anticipates generating about $30 million annually in fees from its current portfolio and pipeline.
Small rooms, big strategy
CitizenM rooms are typically only about 170 square foot (14 square meters), allowing the brand more space per hotel room and lower room rates.
CitizenM uses pre-fabricated, modular components to reduce costs.
CitizenM was one of the few hotel brands that experimented with loyalty programs without points, like a paid model in which subscribers receive discounts on rooms and shared workspaces. Marriott has not confirmed if it will continue these experiments when it integrates CitizenM with its Marriott Bonvoy loyalty points program.
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